Encana sells Bighorn gas assets to Apollo as part of shift to oil production
CALGARY (Bloomberg) -- Encana, Canada’s largest natural gas producer, is selling its Bighorn assets in Alberta to Apollo Global Management for about $1.8 billion as the company continues its shift into oil production.
The sale includes about 360,000 acres along with interests in pipelines, facilities and service arrangements. Total net proved reserves at the end of 2013 were approximately 1.1 Tcfe, about 75% of which is natural gas.
Encana has been selling gas fields and buying oil fields to boost profit by producing the more valuable fuel. It has sold or agreed to sell $4.1 billion of assets this year, according to data compiled by Bloomberg. Earlier this month, Encana paid $3.1 billion for Freeport-McMoRan assets in the Eagle Ford Basin in Texas, doubling its crude output.
“Bighorn is a high quality asset that has not been receiving significant investment in 2014,” Encana Chief Executive Office Doug Suttles said in the statement. “It should serve as an excellent foundational asset for Jupiter Resources.”
Apollo’s Jupiter Resources, based in Calgary, is a portfolio investment of funds managed by affiliates of the New York-based private-equity firm, which describes itself as “contrarian.”
“We are very excited about the opportunity to actively develop the Bighorn assets, one of North America’s premier liquids-rich natural gas projects,” Simon Bregazzi, CEO of Jupiter Resources, said in a separate statement.